The week begins with somewhat conciliatory messages from U.S. President Trump regarding tariffs, following the Federal Reserve's positive assessment of the economy. S&P 500 futures have risen after a slight gain on Friday, driven by Trump's hints at flexibility. However, after a turbulent start to his presidency, particularly concerning China, Mexico, and Canada, traders are hesitant to commit to bets that Trump is ready to strike deals.
Trump mentioned plans to speak with Chinese President Xi Jinping, and U.S. Trade Representative Robert Lighthizer is set to meet with his Chinese counterpart this week. Additionally, a Republican senator and executives from companies like Apple and Pfizer assuredly met with Chinese Vice Premier He Lifeng, discussing China's business potential.
On Monday, we will see the release of global purchasing managers' index (PMI) figures, which are anticipated to confirm the recent fiscal policy-driven boost in Germany, France, and other European economies.
Weekend reports indicated that the U.S. aims to reach a truce agreement between Russia and Ukraine by April 20. Trump commented that efforts to manage the conflict were "somewhat under control." Nonetheless, markets remain focused on Trump’s proposals affecting trade partner countries. Recent updates suggest imminent actions on the 15% of countries facing the highest tariffs and significant trade volumes with the U.S., referred to by Treasury Secretary Scott Bessent as the "Dirty 15."
The European Union is adopting a conciliatory stance and has postponed its initial response to the U.S. until mid-April, which means the 50% tariffs on U.S. bourbon, wine, toilet paper, and other goods are currently under review. France and Italy, the largest exporters of wine to the U.S., are eager to avoid a trade war, as is Irish Prime Minister Micheal Martin, who is pleased with Europe’s strategic response.
In addition to the PMIs, the week will feature the U.S. Federal Reserve's favored inflation reading, inflation data from Australia and Japan, an update from Britain, and significant earnings reports from China. Fed officials last week echoed that while the U.S. economy is doing well, there is a need for a cautious policy approach due to ongoing economic uncertainty.
In emerging markets, Turkey's lira is under pressure following the jailing of President Tayyip Erdogan's main rival, which has unsettled investors.
Key developments that could influence markets on Monday include:
Speakers: Fed Governor Michael Barr, Bank of England Governor Andrew Bailey Earnings: Hargreaves Lansdown PLC, Travis Perkins PLC Data: Flash PMIs for France, Germany, the UK, Euro Zone Debt Auctions: France - reopening of 3-month, 6-month, and 1-year auctions; Germany - reopening of 3-month and 9-month government debt auctions.